MMA Payout

The Business of Combat Sports

Unredacted passages and footnotes reveal more about Zuffa’s business in plaintiffs’ expert report

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MMA Payout had the opportunity to review the proposed amended redactions from Zuffa to Plaintiffs’ expert, Hal Singer in the UFC Antitrust lawsuit. The newly revealed sections that were previously blocked from public view, gain some insight into the factual underpinnings of the promotion.  This is the first of a couple posts related to Dr. Singer’s expert report.

Late last month Zuffa, filed a revised version of redactions it sought for Dr. Singer’s expert report. The newly unveiled versions of the report provide some innocuous passages as well as some interesting tidbits which the promotion originally wanted redacted from public view.

The Last Hope – Strikeforce

One of the more interesting unredacted sections include deposition testimony from Bellator head Scott Coker.  While with Strikeforce, Coker indicated that the promotion was the last possible chance of competition with the UFC.  The line might remind you of this.

The acquisition of Strikeforce occurred after Affliction’s demise.  Singer’s expert report reflects the notion that Zuffa tried to exert its market force over the competition.  Coker stated at his deposition:  “If you can’t battle these guys [UFC] it’s over for the MMA industry.  UFC will be the only one left.  We’re the last chance.  Otherwise, fighters’ purses will go down if UFC is the only one – is the only one period.  We’re Luke Skywalker and UFC is Darth Vader and the Death Star.”

Interesting enough, as many know, after Strikeforce was engulfed by the UFC, Coker was  a part of the company until he was able to go to Bellator.  Coker sent this tweet after Cris Cyborg, who is heading into free agency, won her fight this past Saturday at UFC 240.

Why purchase Pride?

The newly unredacted information in the report includes emails from Zuffa’s outside counsel addressing the company’s acquisition of Pride.  In a rather ominous email that may be one to cover the attorney, it states, “the strategic/preemptive nature of this acquisition (i.e., to stop others from buying it) and you having seriously contemplated acquiring them only to shut down their business and utilize their Fighters in the UFC.”  Another unredacted footnote from a corporate representative from Deutsche Bank stated that ‘based on conversations with Zuffa and materials provided by Zuffa, Deutsche Bank’s interpretation was that “Each acquisition [Pride, WEC and WFA] had unique offensive and defensive purposes at the time.  However both the WFA and Pride transactions resulted in Zuffa’s roster of elite fighters expanding significantly.”

It’s worth noting that while the Deutsche Bank comment may buttress the argument of a predatory Zuffa looking to buy up the rest of the MMA promotions in the space, it is speculation and essentially hearsay – a statement made without foundation to assert the truth of the matter.  Deutsche made the conclusions based on conversations and documents not known in the passage so its hard to say whether the documents would be reliable.  Yet, you may infer that the position that Deutsche Bank was in as a lender to Zuffa would command truth and honesty on the part of the organization.

UFC pays DeathClutch

Brock Lesnar’s pay was revealed in a footnote that was unredacted.  When he fought as champion, Lesnar’s company, Deathclutch, was paid $812,500 within 30 days of a fight.  He was then paid another $812,500 within 60 days following the completion of the bout for a total of $1.625 million minus deductions and withholdings. Lesnar was paid a sum of $750,000 for fights where he was not UFC Champion. Similarly, he was paid $375,000 within the first 30 days and another $375,000 within 60 days.

On the issue of fighter pay within the UFC, Singer’s report is a Letter of Agreement from Lyoto Machida that gave him a $100,000 bonus for a fight stoppage.  Presumably this would be in addition to any Performance or Fight of the Night bonus.

The Letter of Agreements according to the report were given to a “small number of top-tier Fighters.”  As explained by Dr. Singer, they were “generally lump-sum payments to Fighters following a Live MMA Event, with the amount often contingent on the outcome of the fight.   Thus, they would not appear in commission reports on purses.  Some were based on a specific outcome and may “also incorporate sponsorship or endorsement agreements or both.”  Dr. Singer explained that the use of these agreements would keep the salaries of Fighters unknown to the public.

Evidence of Counterprogramming to hurt rivals

Another swath of footnotes revealed UFC plans to counterprogram rivals.  The UFC began to air its programming opposite other promotion’s big events starting in 2006.  The UFC first aired a taped compilation of fights opposite a WFA PPV.  In 2008, it countered Affliction’s PPV with a ‘re-run of a prior pay-per-view event on free television.  White openly admitted to throwing together a fighter card  in five weeks in an attempt to choke out another promotion.